KUALA LUMPUR (Oct 15): JAKS Resources Bhd (KL:JAKS) has proposed to place out up to 10% of its total issued shares to third-party investors to be identified to raise an estimated RM40.71 million for debt repayment and working capital.

In a bourse filing Thursday, the construction and energy group said the private placement will involve up to 262.63 million new shares.

The issue price has yet to be fixed. The estimated proceeds is based on an illustrative price of 15.5 sen per share. The final price will be no more than a 10% discount to the five-day volume-weighted average market price of JAKS Resources shares immediately prior to the price-fixing date.

Of the indicative proceeds, JAKS Resources has earmarked RM33.50 million to partially repay existing credit facilities, which is expected to yield annual interest savings of about RM2.37 million.

As at Oct 13, the group’s total bank borrowings stood at RM422.39 million — comprising RM232.2 million short-term borrowings and RM190.15 million long-term borrowings — which it plans to reduce to RM388.89 million.

Of the remaining proceeds, RM5.91 million has been budgeted for general working capital — including staff costs, directors’ fees and administrative expenses — while the balance will cover estimated expenses for the exercise.

M&A Securities Sdn Bhd has been appointed as the adviser and placement agent for the exercise, which is targeted for completion by the fourth quarter of 2026.

JAKS Resources shares closed half a sen or 3.45% higher at 15 sen on Thursday, giving the company a market capitalisation of RM393.94 million.